CBN saves $100m from Forex weekly as BDC operators drop by 58.42%

The Central a Bank of Nigeria (CBN) saves almost $100 million per week on foreign exchange as the number of Bureau De Change (BDC) operators drop by 58.42 percent to 1200 from 2886 following the implementation of the Bank Verification Number (BVN).

“This policy seems to have chased away unscrupulous BDC operators and allow only genuine operators to remain in the market”, Godwin Emefiele, governor of CBN, said in Lagos at the 49th annual bankers dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN)

In order to ensure transparency, the CBN had directed that all BDCs request for BVN for sale of forex. “While it may be too soon to completely adjudicate on the merits of our policies, preliminary signs indicates that we are headed to the right direction as a people. For example, we have managed to attain stability in the exchange rate at about N197/$1 since February 2015, although some are not happy with us for that action. Most speculators and rent-seekers have been eliminated from the forex market”, he said.

Also, Emefiele noted that domestic production of excluded items such as tomato paste, rice, fish, aluminum items, and others are picking up gradually, adding that despite the sharp drop in inflows, the country’s forex reserves is still at about $30 billion which is enough to cover about six months of Nigeria’s imports as against the traditional benchmark of three months.

He noted that the last time the country had oil prices at $50 per barrel for an extended period of time was in 2005 and the total import bill for that year was only N148 billion. Yet, in the first nine months of this year, the total import bill has already risen to N917 bibillionas by logical extention, heading towards N1.2 trillion by the end of the year.

“I am not unaware of thee short term pains associated with our policy decisions, but I urge you all to understand that this time is different. This is an opportunity for us to look inwards, diversify our economy away from oil, produce locally and create jobs for our unemployed youths. Countries that successfully managed during the period of drop in crude prices are those who embraced the concept of producing and consuming locally made goods”.
Consequently, the CBN plans toembark on a national campaign called PAVE which stands for : Produce Locally, Add Value and Export.

“We definitely cannot survive as a people by importing everything and anything. We are a resilient and hardworking people and I am confident that out of these difficulties would come out the best ideas. I am assured that better days are around the corner and we just cannot lose faith. This is the time to display our resilience as a nation and we must all put our hands on the deck to ensure a better economy for Nigeria”, Emefiele said.

In her welcome address, Debola Osibogun, President/Chairman of Council, CIBN, said the year has been an eventful one, not just for the banking industry, but for all sectors of the economy.

She said there has been enormous challenges in our economic sphere but “we are all here today standing strong as a formidable sector within the Nigerian polity due to our resilience and dedicated collaborative resolve and efforts as regulators and operators of the banking industry to surmount and survive every challenge and maintain our role as the engine of growth for the economy. There is no doubt, that we are more prepared to forge ahead into the future with greater optimism given the current initiatives that have been introduced by the Central Bank of Nigeria and the Federal Government”.

 

Hope Moses-Ashike